In the 1930’s, when President Roosevelt seized physical gold from Americans, gold mining companies remained untouched by the draconian move. And, while stocks in the United States dropped precipitously and remained depressed for a decade, companies whose primary business was the exploration and mining of gold and silver rose to new highs. Homestake mining, a gold mining firm operating during FDR’s Presidency, was one such company that saw its shares skyrocket over 500%.
A similar effect occurred in the 1970’s, after the US dollar was taken off the gold standard. By the early 1980’s gold had once again reached new highs – highs that were not surpassed until the debt crisis of 2008 took hold, nearly thirty years later.
This crisis, like the deflationary depression of the 1930’s and the inflationary recession of the 1970’s, won’t be much different, as panicked investors hoping to protect their wealth will once again turn to the tried and true hard asset of choice during times of crisis: gold.
Watch as one of the most respected contrarian resource analysts, Marin Katusa of Casey Research, discusses gold as sound money:
If you take all the gold that’s ever been mined and that’s currently being mined… you can fit that into Dallas Cowboys stadium. Just to put that in perspective.
Gold is a very rare thing because the economic deposits of gold are very rare. It is a precious metal.
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If you invest in one of those companies that finds and proves up an economic gold deposit, you can make anywhere from ten to a hundreds time your money.
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We always start with people. That’s the most important thing when you invest… who are the guys running this company that I am going to invest in.
One deal that Rick Rule, Doug Casey and I are very large shareholders in because we absolutely respect the management team and we believe they’re going to bring significant returns and profits for us is a company called Brazil Resources, which already has gold in the ground. They’ve got millions of ounces of gold…their exploration projects are fantastic…. but more importantly, the management is top tier.
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In North America we’ve had such a good time that we can’t imagine what it would be like if there was true chaos. But when it happens, they’ll call the people who invested in gold and had actual physical gold, they’ll call them ‘lucky.’ But the true definition of lucky is being prepared when the opportunity arises.
Indeed, should the worst happen in America, those who prepare will be few and far between, and those who failed to foresee the coming calamity will view them as “lucky” for having spent the time, effort and sweat to position themselves appropriately.
